PR930623 Note: An appeal pursuant to s.45 (C2003/85) was lodged against this decision - refer to Full Bench order dated 25 November 2004 [ PR935400 ] for result of appeal. PR930623 Download Word Document AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION Workplace Relations Act 1996 s.170CE application for relief in respect of termination of employment Marc John Watson and CJ Ord River Sugar Pty Ltd (U2002/5160) COMMISSIONER O'CONNOR PERTH, 23 APRIL 2003 Termination of employment. DECISION [1] This is an application pursuant to s.170CE of the Workplace Relations Act 1996 (the Act) by Marc John Watson alleging his termination by CJ Ord River Sugar Pty Ltd was harsh, unjust or unreasonable and he seeks reinstatement and compensation by way of remedy. [2] CJ Ord River Sugar Pty Ltd opposes the application and alleges that the applicant was terminated for misconduct to wit it is alleged he worked in his own business whilst claiming and receiving paid sick leave from his position at the mill. [3] Mr Watson was employed as a fitter at the Ord Sugar Mill in April 2000 when the mill was owned and operated by CSR, a predecessor to CJ Ord River Sugar Mills. Mr Watson gave evidence that his work comprised general maintenance fitting, breakdown repairs, crane operation and some boilermaking work. [4] Mr Watson's employment was terminated by Mr J Mullen, the mill engineer, who handed him a letter addressed as follows: "This is to advise that your employment with CJ Ord River Sugar Pty Ltd is terminated. The reason for your termination is misconduct. This relates to you working in an outside business while on sick leave from your primary place of employment. You have had an opportunity to explain your action at a meeting held on Tuesday 3rd September but I do not consider that you have provided an acceptable explanation. As a result of your behaviour, and your failure to provide an adequate reason for your behaviour, your employment will end at the date of this letter. You will be paid 4 weeks in lieu of notice and any outstanding leave and leave loading. The amount will deposited directly into your bank account and your final payslip mailed out to you." [5] Mr Cuomo, for Mr Watson, called two witnesses, Mr Watson and his partner Ms Mandy Edwards. [6] Mr Watson gave evidence that on Saturday, 24 August 2002 he fell from the top of his vehicle whilst lopping a tree at home. He stated he attended the doctor who advised him that he had a broken rib and put him off work for a week. [7] He stated that he rang a Ms Ozanne, the receptionist at the mill, on the Monday following the accident and advised her he was off work for a week. He stated this was the normal procedure since the supervisor, Mr Mullen, was not readily available because he was located in the mill proper and Ms Ozanne relayed messages to him. [8] He gave evidence that Mr Mullen had a conversation with him on the following Tuesday whereby he asked him if the doctor stated whether he could perform light duties. He attested Mr Mullen suggested perhaps crane driving or roller arcing. Mr Watson attested that he advised Mr Mullen he was prescribed strong pain killing drugs and it would be illegal to operate the crane. Further since he had a broken rib he doubted he would be able to roller arc since this entailed being hunched over for long periods. However he would ask the doctor at his next visit to outline what he could do. [9] He further attested that when assisting in the shop the only job he could do was to fry chips. He stated that the job only required him to lift a small basket, the job was not strenuous and he took Panadeine Forte to carry out this function. [10] He stated that the shop was running at a loss, his partner could not manage on her own and necessity drove him to assist on the two nights he worked there. [11] Ms Edwards gave evidence to the extent of Mr Watson's incapacity. She stated the shop was closed for the first week of Mr Watson's injury and on the two occasions he attended in the second week, all he did was put the baskets in and out of the fryer. [12] The respondent called four witnesses to give evidence, Mr JS Jeon, the President of CJ Ord River Sugar, Mr Jock Mullen, the mill engineer, Mr Michael Conroy, production superintendent and Mr Wayne Wiseman, leading hand at the mill. [13] Much of the evidence given by Mr Mullen and Mr Wiseman related to Mr Watson's performance and although this may have some bearing on remedy since Mr Watson was terminated for misconduct, the issues of his performance are not relevant in this determination. [14] In C Kine v Freshmore (Vic) Pty Ltd , Print S4213, the Full Bench defined the issues to be identified in the case of Termination for Misconduct. They are: (1) Did the conduct occur. (2) Could it reasonably be held to constitute misconduct. (3) If it was misconduct, was termination harsh, unjust or unreasonable. [15] Mr Mullen gave evidence that on Monday, 26 August 2002 he had been advised by the company receptionist that Mr Watson had called her and advised her that he had injured himself at home over the weekend and that he would not be attending work from 26 August until 2 September 2002. She further added he advised her that he had a doctor's certificate and would be going back to see the doctor at the end of the week. [16] Mr Mullen stated that on Monday 2 September 2002 he had been advised that Mr Watson had been seen working at his partner's fish and chip shop over the weekend. He was also advised on that day that Mr Watson had been issued with a certificate for a further week until 9 September 2002. He received this advice from the company accountant, Julienne O'Doherty. [17] Mr Mullen then phoned Mr Watson and asked if he was fit for light duties. He said "Does your medical certificate allow you to look at doing any light duties?" Mr Watson replied "not at the moment, I have complete coverage until the end of the week and cannot work." [18] Mr Mullen then asked if Mr Watson could do crane driving or roller arcing to which Mr Watson said he would have to wait until he saw the doctor next. [19] He attested that on 3 September 2002 he attended Mr Watson's partner's fish and chip shop at 6.20pm. He observed Mr Watson with a stainless steel basket in his right hand, the basket appeared to have fish and chips in it. He then asked Mr Watson to come to the mill the following day to see him. [20] Mr Mullen stated that he went to Mr M Conroy's (production superintendent) house telling Mr Conroy he had observed Mr Watson working in the fish and chip shop and requested Mr Conroy go down to verify this claim. [21] In evidence, Mr Conroy stated that he observed Mr Watson behind the counter with a tea towel over his shoulder. [22] The following day Mr Mullen confronted Mr Watson about working in the fish shop whilst off work sick. He said that Mr Watson stated he was assisting his partner because there was a shortage of staff and he had drugged himself up to be able to assist. [23] Mr Mullen stated words to the effect - "my view is that if you can work somewhere else then you should be able to work here". To which Mr Watson replied "its not quite that simple, a couple of hours in the shop is different to here". [24] Under cross examination by Mr Cuomo, Mr Mullen stated that he did not request Mr Watson perform light duties, he only suggested perhaps he might be able to do so. He also stated he did not ask Mr Watson to go back to the doctors and seek an alteration to the terms of the certificate to allow for light duties. Did the alleged conduct occur? [25] Mr Watson gave evidence that he assisted his partner in the shop on the evening of Sunday 1 September and Tuesday 3 September for 2 hours. He stated that he assisted by cooking fish and chips. [26] Mr Mullen and Mr Conroy observed him doing so on Tuesday 3 September. The conduct did occur. Was the conduct of a sort that can be adjudged misconduct? [27] Mr Watson was a diesel fitter who broke his rib whilst at home. His doctor certified him unfit for the work of a diesel fitter for two subsequent weeks. [28] Evidence was led that the work Mr Watson was required to perform was heavy work and no doubt the doctor took this into consideration when issuing the certificates. Evidence was also led that demonstrated that the medication he was required to take stated: "This medication may cause drowsiness and may increase the effect of alcohol. If affected, do not drive a motor vehicle or operate machinery." This would also be a matter taken into consideration by the doctor in issuing the certificates. [29] In evidence Mr Mullen stated that what was objectionable to the company was Mr Watson claiming benefits from the company and not working for the company, when he was probably in a capacity to do so. [30] Sick pay is not a benefit, it is an entitlement negotiated by the association with the company and is enshrined in the certified agreement. The payment is to compensate the employee for the loss of ordinary time wages that is incurred when the worker is unable to attend as a result of sickness or injury. [31] A doctor's certificate certifying Mr Watson unable to attend for fitter's duties does not compel him to shut down his whole life, and the work he performed in the fish shop was not for reward nor could be seen to be excluded by the doctor's certificate. Indeed it was for a very limited period and could be described as sedentary. [32] It is clear, when examining Mr Mullen's testimony under cross examination, his actions in recommending the termination of Mr Watson were shaped by some personal views on the morality of Mr Watson's behaviour. These views were incorrect in the circumstances. [33] I find Mr Watson's actions do not amount to misconduct. [34] Section 170CG(3)of the act provides: (3) In determining, for the purposes of the arbitration, whether a termination was harsh, unjust or unreasonable, the Commission must have regard to: (a) whether there was a valid reason for the termination related to the capacity or conduct of the employee or to the operational requirements of the employer's undertaking, establishment or service; and (b) whether the employee was notified of that reason; and (c) whether the employee was given an opportunity to respond to any reason related to the capacity or conduct of the employee; and (d) if the termination related to unsatisfactory performance by the employee-whether the employee had been warned about that unsatisfactory performance before the termination; and (da) the degree to which the size of the employer's undertaking, establishment or service would be likely to impact on the procedures followed in effecting the termination; and (db) the degree to which the absence of dedicated human resource management specialists or expertise in the undertaking, establishment or service would be likely to impact on the procedures followed in effecting the termination; and (e) any other matters that the Commission considers relevant. [35] Since the conduct that occurred was not misconduct there could be no valid reason for the termination, and I so find. [36] Mr Watson was notified of the reason for his termination by correspondence from Mr Je Sung Jeon dated 6 September 2002. [37] Mr Watson was given an opportunity to respond at the meeting held on 4 September 2002 when Mr Mullen put the accusation to him. This meeting terminated with Mr Mullen stating "Ok I will review your comments and meet with you again in the next day or so, thanks for your attendance at this meeting." [38] The termination was not related to performance but was for alleged misconduct. [39] The employer is a division of a large international conglomerate. [40] Although the operation is at Kununurra, it does not appear to have a dedicated human resources operative, they have had access to professional advice from the Western Australian Chamber of Commerce and Industry. [41] Having regard to all the evidence, submissions and exhibits in this matter I find that in the circumstances the termination of Mr Watson was harsh, unjust and unreasonable. [42] Sec.170CH of the act provides: 170CH Remedies on arbitration (1) Subject to this section, the Commission may, on completion of the arbitration, make an order that provides for a remedy of a kind referred to in subsection (3), (4) or (6) if it has determined that the termination was harsh, unjust or unreasonable. (2) The Commission must not make an order under subsection (1) unless the Commission is satisfied, having regard to all the circumstances of the case including: (a) the effect of the order on the viability of the employer's undertaking, establishment or service; and (b) the length of the employee's service with the employer; and (c) the remuneration that the employee would have received, or would have been likely to receive, if the employee's employment had not been terminated; and (d) the efforts of the employee (if any) to mitigate the loss suffered by the employee as a result of the termination; and (e) any other matter that the Commission considers relevant; that the remedy ordered is appropriate. (3) If the Commission considers it appropriate, the Commission may make an order requiring the employer to reinstate the employee by: (a) reappointing the employee to the position in which the employee was employed immediately before the termination. (b) appointing the employee to another position on terms and conditions no less favourable than those on which the employee was employed immediately before the termination. (4) If the Commission makes an order under subsection (3) and considers it appropriate to do so, the Commission may also make: (a) any order that the Commission thinks appropriate to maintain the continuity of the employee's employment; and (b) subject to subsection (5) - any order that the Commission thinks appropriate to cause the employer to pay to the employee an amount in respect of the remuneration lost, or likely to have been lost, by the employee because of the termination. (5) If, as a result of an application under section 170CP, a court has awarded an amount of damages for a failure to give notice of a termination as required by section 170CM, any amount ordered to be paid by the Commission under paragraph (4)(b) in respect of the termination is to be reduced accordingly. (6) If the Commission thinks that the reinstatement of the employee is inappropriate, the Commission may, if the Commission considers it appropriate in all the circumstances of the case, make an order requiring the employer to pay the employee an amount ordered by the Commission in lieu of reinstatement. (7) Subject to subsection (8), in determining an amount for the purposes of an order under subsection (6), the Commission must have regard to all the circumstances of the case including: (a) the effect of the order on the viability of the employer's undertaking, establishment or service; and (b) the length of the employee's service with the employer; and (c) the remuneration that the employee would have received, or would have been likely to receive, if the employee's employment had not been terminated; and (d) the efforts of the employee (if any) to mitigate the loss suffered by the employee as a result of the termination; and (e) any other matter that the Commission considers relevant. (8) In fixing an amount under subsection (6) for an employee who was employed under award conditions immediately before the termination, the Commission must not fix an amount that exceeds the total of the following amounts: (a) the total amount of remuneration: (i) received by the employee; or (ii) to which the employee was entitled; (whichever is higher) for any period of employment with the employer during the period of 6 months immediately before the termination (other than any period of leave without full pay); and (b) if the employee was on leave without pay or without full pay while so employed during any part of that period - the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations. (9) In fixing an amount under subsection (6) for an employee who was not employed under award conditions immediately before the termination, the Commission must not fix an amount that exceeds: (a) the total of the amounts determined under subsection (8) if the employee were an employee covered by the subsection; or (b) the amount of $32,000.00, as indexed from time to time in accordance with a formula prescribed by the regulations; whichever is the lower amount. (Note: section 170CH(9)(b) indexed to $40,800.00 from 1 July 2002) (10) For the avoidance of doubt, an order by the Commission under paragraph (4)(b) or under subsection (6) may permit the employer concerned to pay the amount required in instalments specified in the order. [43] Much evidence was brought as to the lack of performance of Mr Watson, in particular his timekeeping. There appears however to be no evidence of any formal, written or verbal counselling on any performance related issue. See Mullen pn 533 to pn 541. [44] When questioned on the affect reinstatement would have on the workforce the following exchange took place: MS REED: Yes, thank you, Commissioner. There is one further matter that I would like to raise. PN319 Mr Mullen, can you tell me what would be the effect on the workforce if Mr Watson were to be ordered to return to work?---The overall morale of the workforce would diminish slightly and I would feel that it would place supervisory staff in an almost untenable position as far as disciplinary type actions in the future. [45] I find fairness to the applicant outweighs a slight diminution of workforce morale and must also consider the lack of opportunity and reputation of the applicant in a small town. [46] I find that reinstatement is the appropriate remedy in the circumstances. [47] No evidence or submissions were made as to the effect of an order for payment on the employer's business. I also find Mr Watson should be compensated for an amount equal to what he would have received had he not been terminated subject to the formula as set down in Sprigg v Pauls Fesitval Foods . [48] Mr Watson had been employed at the mill for two and a half years and prior to his termination there had been no indication given to him that he would not have continued in employment for at least another twelve months. [49] Mr Watson was terminated on 6 September 2002. He had earned a gross amount of $2,793.00 since that date His salary at the mill was $48,971.00 per annum, which would equate to an amount of $31,077.00 for the period he was off work, less the amount he has earned and less 10% for contingencies, equates to a sum of $24,555.00. [50] An order shall issue in the following terms: CJ ORD RIVER SUGAR PTY LTD shall reinstate Mr Marc John Watson to the position he was employed in immediately prior to his termination and pay to Mr Watson an amount of $24,555.00 in compensation. BY THE COMMISSION: COMMISSIONER Appearances: M Cuomo of the Aboriginal Legal Service of Western Australia, Inc for the applicant F Reed of Freehills for the respondent Hearing details: 2003. Kununurra; March Printed by authority of the Commonwealth Government Printer <Price code C>